Cartels, cement companies jack up price

Hyderabad: Cement manufacturing firms are resorting to “dual pricing” to escape the government action on “cartelisation”. Though there is not much demand for cement now, the prices in the retail market have shot up by Rs 50 per bag in the last week.

However, cement manufacturers are offering a bag for less than Rs 200 for the government to take up various infrastructure and other projects.

Commoners, meanwhile, have to buy the same bag for over Rs 350.

This way, the cement firms are ensuring that there is no problem from the government’s side for selling cement at higher prices.

While builders and consumers had accused cement firms of forming “cartels” to jack up prices artificially and had even lodged complaints with the Competition Commission of India (CCI) last year, no action was initiated against the companies on the ground that the complainants had failed to provide sufficient proof in support of their allegations.

Cement prices in both AP and TS had started increasing sharply after the general elections in May 2014. This had led to builders agitating and stopping the purchase of cement in protest.

The government had invited the cement firms for talks and the latter had agreed to reduce the prices. But in reality, the reduction was effected only for the purchases made by the government.

“After the deregulation of the cement sector, the role of the state governments in controlling cement prices is minimum. The Centre has to play a major role in this by bringing a tight regulatory mechanism. If the prices are increased based on the manufacturing costs and inflation, there is nothing to object. But what is happening is that the cement firms are forming cartels to jack up prices artificially, which needs to be checked,” said C. Shekar Reddy, ex-officio member, CREDAI.

Builders are questioning the cement firms on how they are supplying cement to the government for less than Rs 200 per bag, while the same is being sold for over Rs 350 to common consumers. “Every cement manufacturing firm is doing the same. Is this not cartelisation of cement firms?" asked B. Narasimha Rao, a builder.